Census 2000 is certainly not what consumers will be thinking about the next time they browse the greeting card aisle. But the census did play a part in what consumers will see on the racks this year. Hallmark, the greeting card giant, based in Kansas City, Mo., uses census data to decide on the product mix that local retailers receive. When combined with psychographic research, such data provides Hallmark with a powerful marketing tool, says Jay Dittmann, the firm's vice president of consumer research. â€œIt is our key lens into the demographics of the population,â€? he says.
Last year, for instance when the first set of Census 2000 statistics began to trickle out, the company increased its focus on its â€œen EspaÃ±olâ€? line, given the projections of a rapidly growing Hispanic population. Hallmark first used online focus groups to create new messages for the â€œen EspaÃ±olâ€? line â€” and then turned to census data to pick the right retail markets to target. It also launched its youth-focused â€œFresh Inkâ€? line, using census data to pick markets with the right age composition.
That's just the beginning. Hallmark executives, like other marketers, have two more years of census 2000 figures to look forward to. Basic population counts, information about race, ethnicity, age and household composition were released last year, but some of the most valuable facts for marketers from the census are still to come â€” such as data on household income for each community in the U.S. That's just the type of information KitchenAid, the upscale appliance manufacturer, is waiting for to target high-income consumers, says Brian Maynard, the company's director of integrated marketing. Meanwhile, Educational Testing Services, the firm that administers the SAT among other exams, is awaiting census stats on the share of adults that have bachelor's degrees â€” so it can decide where to place new testing centers, says Rick Fry, senior research scientist at the Princeton, N.J.-based concern.
The wait for numbers on income, education and many other consumer characteristics will be over by the end of this year. First, in the early part of the year, details on racial and ethnic groups will be released, explaining how age and household arrangements vary by race and ethnicity â€” a boon to marketers beefing up their ethnic marketing plans. Over the summer, some of the most valuable information for businesses will make its first appearance when data from the census long-form is finally released.
The long-form was completed by 1 in every 6 U.S. households, and included more than 50 questions on a wide range of social, economic and occupational characteristics. The survey will provide the first update in a decade on a variety of questions, such as, how many consumers speak a language other than English at home? How many people are taking care of their own grandchildren? And who is living in apartments versus houses, mobile homes or other structures? The first release of long-form stats will be called â€œSummary File 3â€? or â€œSF 3.â€? A few months later, in the fall of 2002, the bureau will make public long-form data for detailed racial and ethnic groups. That release will be called â€œSummary File 4â€? or â€œSF 4,â€? and the information will be released slowly, concluding in February of 2003.
While there's still much to look forward to from the Census Bureau, a lot is already known about how the consumer market changed over the past decade. Here's a look at what businesses have learned from Census 2000 to date.
THE FASTEST GROWING CONSUMER MARKET IN HISTORY
The U.S. population grew at a historic pace between 1990 and 2000, creating an enormous market for businesses to target. Over the past 10 years, the population exploded by 32.7 million people to 281 million, an increase of 13.2 percent. This represents the largest increase in the consumer market since the start of the Baby Boom. (Between 1950 and 1960, Boomer births boosted the population by 28 million people.) The population explosion of the 1990s took demographers by surprise. After three decades of slowing growth, most experts anticipated that the U.S. population would continue that trend. Creating the shock wave: larger than expected and larger than measured numbers of immigrants, both legal and illegal.
THE WEST IS ONE
This fast-growing consumer market was not distributed evenly throughout the nation. Although every state experienced some population growth â€” the only time in the 20th century that this happened â€” growth rates ranged from a staggering 66 percent in Nevada to less than 1 percent in North Dakota.
Where are the fastest growing consumer markets? Follow the sun. States in the West and in the South grew the most over the past decade, with the West leading the way: the region's population grew by 19.7 percent between 1990 and 2000. The second fastest growing region was the South, which experienced a 17.3 percent increase. The slowest growth was experienced by the Northeast, which grew by just 5.5 percent over the past 10 years, followed by the Midwest, which increased by 7.9 percent. Although the fastest growing consumer markets will still be found in the West and South over the next 10 years, smaller states in the region will see the largest rates of population growth. While many states in the South and the West posted impressive growth numbers between 1990 and 2000, their population growth engines are starting to slow down. For example, California grew by 4 million people between 1990 and 2000, an increase of about 14 percent. But between 1980 and 1990, the state grew by 26 percent. Florida also seems to be losing steam: Although the state grew by 24 percent over the past decade, it grew by 33 percent during the 1980s.
In a quest for scenic beauty â€” and states free from sprawl â€” consumers are creating growth markets in some less traditional places. Idaho, for example, grew by 29 percent between 1990 and 2000, an enormous increase from its 6.6 percent growth rate during the 1980s. Colorado, Nevada, Oregon, Wyoming, Utah and Montana have all become population magnets.
As the population grew tremendously, the way marketers and researchers understand consumers underwent a dramatic overhaul. â€œWe are at a moment where the racial classification system that we have known for the past 200 years is disappearing,â€? declared Kenneth Prewitt, former Census Bureau director, addressing the Population Association of America's annual conference in March of 2001.
In the 2000 census, for the first time, people had the option to identify themselves with more than one race, being able to choose from a possible 126 combinations. Although only 2.4 percent of the population, or about 7 million people, identified themselves as multiracial, these new categories have provided businesses with a better understanding of how Americans perceive their racial identity.
Among the multiracial, the most common grouping is â€œwhite and some other race.â€? Some 32 percent of self-declared multiracials are in this category, and are likely to be of Hispanic origin. Next in line is â€œwhite and Native American,â€? at 16 percent of the multiracial population, followed by â€œwhite and Asianâ€? (12 percent) and â€œwhite and blackâ€? (12 percent).
Today, the multiracial trend is of most interest to companies that are targeting the young. Multiracials tend to be younger than people who identify with just one race. Only 26 percent of the total population is under 18, while 42 percent of multiracials fall in this age group. But thanks to the relative youth of the multiracials, over time, they will become a more powerful segment of the adult market. It's likely that marketers targeting all age groups will eventually have to take this segment into account.
By far, the biggest story for corporate America from the census is the growth of the multicultural market. And yet, the biggest ethnic identity story in Census 2000 did not stem from skin color. The Hispanic population grew at a staggering pace between 1990 and 2000. (Hispanics can be of any race.) Some 35.3 million people identify themselves as Hispanic, rivaling the black population for the status of largest minority group.
This new information caused many companies to shift their business plans to take into account this burgeoning group. In fact, the demand for Hispanic marketing services was so strong that CreatAbility, a Coral Gables, Fla.-based ad agency that handles Met Life, Nike and Royal Caribbean, among other accounts, decided to drop the English-language component of its business to focus solely on the Hispanic market. Managing Partner Jose Lopez-Varela credits Census 2000 with the change in business strategy. â€œSometimes it takes the government to say something for people to really believe it,â€? he says. â€œThe business community really reacted to the numbers. Doors that we ran into before when we were talking about the Hispanic market, are now open.â€?
What's more, the Hispanic market has ceased to be a mere matter of regional concern. The population has spread out all across the U.S., boosting Hispanic counts in small towns as well as big cities. In the Midwest, for example, the Hispanic population increased by 1.4 million people, to more than 3 million in total, now accounting for 5 percent of all Midwesterners. In fact, in states like Kansas, South Dakota, Missouri and Wisconsin, the number of Hispanics doubled during the 1990s. At the same time, the Hispanic population continued to grow in more typical venues. In New York City, for example, they accounted for 24 percent of residents in 1990. By 2000, Hispanics constituted for 27 percent of the city's residents, or some 2 million people.
Of course, Hispanics are only one part of the multicultural marketplace. Nearly 70 million Americans identify themselves as something other than white alone, according to the census, the largest number in the nation's history. About half of the multicultural population, or 36 million people, identifies itself as black alone, or in combination with other races: 12 million identify as Asian alone, or in combination with other races. The rest consider themselves either Native American, Native Hawaiian, or â€œsome other race.â€?
NOT QUITE UNITED STATES
Despite the nation's increased diversity, most neighborhoods are still racially segregated, according to an analysis of Census 2000 by the Lewis Mumford Center at the State University of New York at Albany. When companies are reaching out to consumers via direct mail or local media, they can still comfortably tailor their efforts to one racial group. â€œThere's been very little change in segregation since 1990,â€? says John Logan, director of the center. â€œThere's a very strong tendency for neighborhoods to swing disproportionately toward a white population or a minority group,â€? he adds.
The average white person lives in a neighborhood that is 83 percent white, 7 percent black, 6 percent Hispanic and 3 percent Asian, according to Logan's analysis. The average black person lives in a neighborhood that's 54 percent black, and the average Hispanic lives in a neighborhood that's 42 percent Hispanic.
The one exception? Asians. Because the Asian American population is the smallest, it is also the most integrated. The average Asian American lives in a neighborhood that's just 19 percent Asian. For marketers targeting this small, but high-income consumer segment, targeting Asian-dominated neighborhoods will exclude a large proportion of the market.
While marketers become accustomed to a consumer population that's more diverse, they're also going to have to get used to a market that's getting older. For many companies, this will necessitate a change in basic marketing strategy. The â€œmasterâ€? market segment has long been the 18- to 44-year-old cohort, and a key component of that segment has declined over the past 10 years. As smaller Gen X replaces Baby Boomers in the young adult market, the number of consumers between the ages of 20 to 34 declined by 3 million, the only age group besides people ages 65 to 69 to decline over the past decade.
The new â€œkey demographicâ€? will likely skew older, as Baby Boomers have started to inflate the ranks of the middle-aged. Over the past decade, the 50- to 54-year-old age cohort expanded by 55 percent to nearly 18 million people, making it the fastest growing age group. The second fastest growing age group was between the ages of 45 and 49, which swelled by 45 percent or 6.2 million people.
THE NEW AMERICAN FAMILY
Just as Census 2000 tells a tale of profound change in racial identity and age structure, it also heralds a new diversity in the American household. Today, for the first time, the number of single-person households is greater than the number of â€œnuclear familiesâ€? â€” married couples with children. Some 23 percent of all households now consist of married couples with children living at home, down from 26 percent just 10 years ago.
Married couple families, with or without children, have become less common over the past decade. No one household type replaces it. Instead, a mix of different living arrangements have moved to take the place of the eroding married couple market: Living alone, living together as unmarried couples, or living with friends or other roommates have all become more common. The number of people cohabiting doubled over the past decade, to 5.4 million. Some 600,000 are same-sex couples.
For businesses, figuring out what these changes in living arrangements will mean for spending patterns and behaviors won't be easy. â€œThe big black box is the decision making process within the household, and that black box is harder to look into,â€? says Bill Keep, professor of marketing at Quinnipiac University, in Hamden, Conn. But because adults are increasingly likely to live in many different household arrangements throughout the course of their lives, Keep says that companies can benefit by â€œhaving a sustained relationship with a customer regardless of their lifestyle.â€?
States with the largest multiracial populations.
|% OF U.S.MULTI-
|Source: U.S. Census Bureau, American Demographics analysis|
Many of the metros that grew by 25 percent or more over the past decade were located in the West or the South.
|Las Vegas, NV/AZ MSA||1,563,282||852,737|
|Naples, FL MSA||251,377||152,099|
|Yuma, AZ MSA||160,026||106,895|
|McAllen/Edinburg/Mission, TX MSA||569,463||383,545|
|Austin/San Marcos, TX MSA||1,249,763||846,227|
|Fayetteville/Springdale/Rogers, AR MSA||311,121||210,908|
|Boise City, ID MSA||432,345||295,851|
|Phoenix/Mesa, AZ MSA||3,251,876||2,238,480|
|Laredo, TX MSA||193,117||133,239|
|Provo/Orem, UT MSA||368,536||263,590|
|MSAs-Metropolitan statistical areas as defined by the Office of Management and Budget.|
|Source: U.S. Census Bureau|
The Hispanic market has ceased to be a matter of regional concern. In the Midwest, for example, the Hispanic population rose by 1.4 million people.
TOTAL HISPANIC TOTAL HISPANICPERCENT POPULATION, 2000 POPULATION, 1990 CHANGE
|Source: U.S. Census Bureau|
The number of people between the ages of 40 and 59 increased by more than 20 million people over the past decade.
|9 and younger||39,725,303||36,453,622||9%|
|10 - 19||40,747,962||34,868,264||16.9%|
|20 - 29||38,345,337||40,333,357||-4.9%|
|30 - 39||43,217,052||41,826,004||3.3%|
|40 - 49||42,534,267||31,488,359||35.1%|
|50 - 59||31,054,785||21,882,269||41.9%|
|60 - 69||20,338,992||20,727,902||-1.9%|
|70 - 79||16,273,254||14,116,192||15.3%|
|80 and older||9,184,954||7,073,904||30.9%|
|Source: U.S. Census Bureau|